I’m always looking for passive income opportunities. I’m interested in how artificial intelligence (AI) can make things easier, faster and more effective.

With this in mind, I asked three leading chatbots for their ideas on the best passive income opportunities. The results were captivating – but not very useful…

What did they say?

ChatGPT was the only one that gave me an answer. Gemini said it wasn’t allowed to recommend stocks, and Claude said it didn’t have access to live market data.

However, ChatGPT gave me a name. It actually gave me a few, but the stocks at the top of the list were Johnson and Johnson (NYSE:JNJ) – a popular name among dividend investors.

It highlighted several key points, including the company’s mighty track record of growing payments and its mighty competitive position in a fairly resilient market. However, he left out one critical thing: the dividend yield on the stock is 2.75%. And although ChatGPT rightly noted that this was not a particularly high value, he did not realize that by buying the shares I would not even get 2.75%.

Dividend taxes

Johnson & Johnson is an American company and I am a British investor. This means that any payouts I may receive from the company are subject to 30% withholding tax. For Form W-8BEN, this percentage is reduced to 15%. So by the time the dividends hit my account, I’ll receive about 2.35% – and that highlights something critical.

Without knowing my financial situation, ChatGPT is unable to accurately assess my returns. It’s not his fault, but it is a key limitation.

My tax situation means that my income from Johnson & Johnson will probably be 15% less than ChatGPT might think. While I like this stock, I think there are more attractive opportunities out there.

FTSE 100 dividends

In my opinion, British investors content with a 2.35% dividend should consider buying Howden Joinery Group (LSE:HWDN) instead. This is another mighty business, but with higher efficiency.

The company is probably less recession-proof than J&J, but I think it’s a great business. Unlike its competitors, it focuses on commercial sales, which gives it several key advantages.

One is that selling to professional customers is more likely to generate repeat business. And secondly, the company does not need costly showrooms – it can operate out of warehouses.

This means it can charge lower prices than competitors while maintaining wider margins. I see this as a really mighty position for the long term, which is why I like it as an investment.

Confidential knowledge

There are good reasons why ChatGPT can’t tell me which dividend stocks I should buy. It depends on specific things about me that it’s unreasonable to expect the AI ​​to know.

It’s not just about being a UK tax payer, there are many things that determine what is best for me. So while I think J&J is a clever idea, I don’t think it’s my best shot at passive income.

In this sense, I think other chatbots have the right response. In a situation where the artificial intelligence is not able to offer me a fully informed suggestion, it is best to hold off.